Jefferson Health’s insurance arm is offering Obamacare plans for 2024, competing with IBC

Jefferson Health is expanding its reach into the insurance business by offering Obamacare health plans to residents of Philadelphia, Bucks, and Montgomery Counties for the first time, according to information released Thursday by the Pennsylvania Insurance Department.

The move puts Jefferson in competition with Independence Blue Cross, the region’s largest health insurer, in the public markets created under President Barack Obama’s signature law to provide health coverage to Americans who don’t have insurance through their jobs and cannot otherwise obtain it.

While buying up hospitals across the Philadelphia region, Jefferson also added insurance products to its business profile in recent years. The nonprofit health system acquired full control of an insurance business, now called Jefferson Health Plans, in November 2021. Since then, it has been Jefferson’s most profitable line of business, providing private plans to low-income people who qualify for the government-funded Medicaid program.

Now the expansion into individual plans sold on the state’s Affordable Care Act marketplace, known as Pennie, gives Jefferson a chance to retain some of the customers it is likely to lose in its Medicaid business.

The Medicaid review process was suspended nationwide for three years during the COVID-19 pandemic, but restarted in April. Hundreds of thousands could lose coverage.

Denise Napier, CEO of Jefferson Health Plans, said in a statement that the company was offering a “high-quality, cost effective” plan. “This is especially important during this time where the public health emergency has ended, people are losing Medicaid eligibility and are in need of quality health insurance options,” she said.

Open enrollment for 2024 insurance plans starts Nov. 1 through Pennie’s website, and Dec. 15 is the deadline to sign up for coverage that begins in the new year.

A group of Philadelphia hospitals founded Health Partners in 1984 as part of an effort to manage the cost of caring for people who get their health coverage through Medicaid.

Jefferson Health’s parent, Thomas Jefferson University, took full ownership of Health Partners in November 2021. It paid Temple University $305 million for the half of the nonprofit insurer that it didn’t already own and rebranded the business Jefferson Health Plans.

Since the acquisition, Jefferson Health Plans has been Jefferson’s most profitable division, with operating earnings of $48 million in the year that ended June 30. During that time, Jefferson’s clinical and academic divisions lost money. The insurance business is based on Market Street in Center City, just a couple blocks east of Jefferson’s headquarters at 11th Street.

Jefferson Health Plans provides insurance for 376,548 people, almost all of them under Medicaid, according to the latest data from the state and Jefferson. The company already competes with Independence in the Medicaid and Medicare markets.

Under former CEO Stephen K. Klasko, Jefferson expanded from three to 18 hospitals. It also acquired Philadelphia University. Health Partners plans was the final piece in what is now a system with $9.7 billion in annual revenue and significant ongoing losses from the hospital side of the business.

Independence is the only company that has offered ACA plans in Southeastern Pennsylvania every year since the start of the marketplace in 2014. For a time, after Aetna dropped out in 2017 because it was losing money, Independence was the only option for individual plans.

Now, Independence has six or seven competitors, depending on the county. IBC sells ACA plans in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties.

A second new competitor for Independence starting next year is Highmark, a large Blue Cross Blue Shield company based in Pittsburgh. In addition to entering the Obamacare market in Southeastern Pennsylvania, Highmark is also selling insurance plans to employers in the region for the first time.

Despite increased competition, Independence still dominates the Obamacare market, with 159,425 Southeastern Pennsylvania residents enrolled this year, according to data from the Pennsylvania Insurance Department. The next largest insurer is Pennsylvania Health & Wellness Inc., with 9,369 enrollees, but some of them are outside the five-county area.

Brett Mayfield, Independence’s local market president, said Friday in an emailed statement that the Philadelphia company welcomes competition.

“As the only health insurer in the region with rate decreases for 2024 and the only health insurer that has consistently offered individual plans since the health insurance marketplace opened, we are proud of our commitment to our members,” he said.